Posted
by
ScuttleMonkeyon Monday December 21, 2009 @05:01PM
from the getting-the-details-right dept.

An anonymous reader writes "My wife and I started an S Corp in 2009 mainly to provide small scale consulting services for friends with small businesses of their own (we build them websites and do odd technical jobs). Now that the year is closing I'm giving thought to our corporate tax filings which will be due March 15th. I've scoured the web for free/open source legal templates for hiring contractors, issuing W-2s, keeping shareholder minute meetings, etc, but haven't been able to find any decent sources. It seems like this should be a priority of the open source community since reducing the cost of entry into small business could drive open source development. What are the best sources of open source legal templates, tax filing software, corporate compliance templates, etc?" What experiences have others had with open sources businesses and the best way to consolidate the necessary corporate mojo into a workable model?

I've scoured the web for free/open source legal templates for hiring contractors, issuing W-2s, keeping shareholder minute meetings, etc, but haven't been able to find any decent sources. It seems like this should be a priority of the open source community since reducing the cost of entry into small business could drive open source development.

I agree that this could only be a good thing. However, most of the Open Source community consists of developers, sysadmins, and other technically-minded folks. By contrast, this is more of a legal issue.

I also wonder if anyone who provides such open-source legal templates might be exposing himself to liability. Suppose someone uses such a template and it turns out to be incorrect, even by some minor technicality, and as a result that person has additional legal expenses or other damages. They just might try to sue the person who produced the template. Unlike software, where disclaiming liability is a standard practice, legal advice or legal documents might be much more problematic. I am definitely not a lawyer but I hope a lawyer might take a moment to explain whether this is a legitimate concern.

I'd say the same but there are sites like Legalzoom.com and such that offer it for a price. I wonder if they have the same issue ? I honestly don't know but I wonder if they have a disclaimer us OSS people could use as well to protect us from this sort of thing.

I'd say the same but there are sites like Legalzoom.com and such that offer it for a price. I wonder if they have the same issue ? I honestly don't know but I wonder if they have a disclaimer us OSS people could use as well to protect us from this sort of thing.

True, though Legalzoom might be a special case. The people behind it are lawyers, so they are much less likely to make such a mistake on the forms. They would also be well-equipped to defend themselves in a lawsuit. Legalzoom is a (presumably) profitable company so a lawsuit, even a successful one, is unlikely to be a showstopper for them. The corporation would be sued but not its individual members. I'd imagine this wouldn't be nearly the showstopper that the same thing happening to a regular non-lawyer citizen who gets personally sued could be.

In light of the topic, I am not giving anyone legal advice nor do my comments intend to replace, compliment, or supplement the enlightened advice of an attorney in your state. In fact, I might be completely wrong so do not rely on anything I say. These are merely my uneducated opinions on the topic at hand.

Interstingly, Legalzoom is a corporation and as such, is not legally allowed to provide legal advice. Many states, allow for Limited Liability Partnerships which as similar to corps. but do not entirely insulate an individual from a lawsuit. In an LLP, one partner is not liable for the malpractice of another partner, but each is liable for his/her own malpractice. Thus, LLPs do not provide absolute insulation from professional liability but the firm as a whole is insulated for another's liability.

Corporations have much broader insulation for shareholders to encourage investment. LLP's aren't allowed to have non-professional investors. Thus, if the LLP is a law firm then only lawyers may invest in the LLP. If the LLP is a medical practice, then only doctors. Basically, most states don't want to guarantee no liability for people in these fields but still want to encourage efficient partnerships. Thus, the LLP was formed.

The fact the Legalzoom exists as a corporation tends to promote the idea that these form providers are not handing out legal advice, at least not under the definition of the states where they provide there forms. Of course, they may be "risking" it and might be in violation of some state's law, but I didn't take the time to go check any individual state's law on the unauthorized practice of law with reference to "legal" forms. There is likely some case law out there with respect to tax forms and wills/trusts forms since people have been publishing self-help books with template forms in those areas for decades.

The fact the Legalzoom exists as a corporation tends to promote the idea that these form providers are not handing out legal advice, at least not under the definition of the states where they provide there forms. Of course, they may be "risking" it and might be in violation of some state's law, but I didn't take the time to go check any individual state's law on the unauthorized practice of law with reference to "legal" forms.

Whether it constitutes legal advice or not is a moot point to me. I wouldn't exp

I guess the status as legal advice matters in a couple of contexts. If it is legal advice then there may be malpractice issues if the advice is bad. There may be a attorney/client relationship and all the duties of loyalty that go along with it. If it is legal advice then the corporation may be committing the unauthorized practice of law.

If it isn't legal advice, then you want to go look to contract and sale of goods laws. The law surrounding warranty would likely apply, though many warranties may be d

As far as I know, there are no particular laws for complex versus simple products.

I didn't mean that to sound like I'd expect the law to care about this. I meant it more in the sense that if a product is so simple that it is extremely unlikely to fail, then what happens if it is defective in some way is much less of a concern. Just the general idea that the more complex something is, the more likely it is to break.

"In my opinion, the law in general is written by lawyers for lawyers, and they have little or no interest in making it as simple and easy to understand as possible, especially for laymen."

Don't you think lawyers think same about software: "the software in general is written by software developers for software developers, and they have little or no interest in making it as simple and easy to understand as possible, especially for layman."

More and more I think law is a form of covering edge cases in archaic language that is well defined in court. One can say that software has a lot of similarities with law.

You can disclaim liability over "legal advice" as well as legal document templates. This is the premise by which websites such as www.docstoc.com get away with offering free legal document templates. (They're actually a great source for start-ups.) It's basically just a matter of making it known and understood that you're not an attorney, nor have the templates been altered specifically for your use, and so you should use them at your own discretion and at the advice of your own legal attorney.

As for the various open source software applications you mentioned, I am not sure, but open source *Business* accounting software is basically non-existent.

For our web development startup, Forward Interfaces, we developed our own time-clock web application with which we can track our hours (we're a small operation of 3 company members thus far) and we plan on developing our own quickbooks-style accounting software, project management and CRM suite. We figure, even if there is existing software out there, it's probably not going to be *exactly* what we need - and hey, we're a software development company!

One key to a successful business is, so much as possible, to only do things that contribute to your bottom line.

Guess what? SAP doesn't work the way the way the really big business who use it want either. They change their entire business process to use SAP.

I work for a Fortune 200 company. We sell food.

Decades ago they wrote the accounting software in COBOL. I work with some of the guys who did the work. But now they're implementing Oracle Financials, and they're changing business process as necessary.

Quickbooks or a similar package is probably sufficient for you - even if it doesn't work exactly how you want. You can almost certainly live with it, and unless your business is the sale of accounting software (web-based or otherwise) you have no business writing your own.

Suppose someone uses such a template and it turns out to be incorrect, even by some minor technicality, and as a result that person has additional legal expenses or other damages.

This is very likely. Such an "open source" document might have been 100% correct when it was originally written, but it wasn't updated for the latest changes in tax code (or whatever) and is therefore out of date.

Perhaps we could have a "WikiForms.biz" -- people could make forms, then keep them up to date.

I've scoured the web for free/open source legal templates for hiring contractors, issuing W-2s, keeping shareholder minute meetings, etc, but haven't been able to find any decent sources. It seems like this should be a priority of the open source community since reducing the cost of entry into small business could drive open source development.

I agree that this could only be a good thing. However, most of the Open Source community consists of developers, sysadmins, and other technically-minded folks. By con

Not only that, but it's documentation - something else the FOSS community is decidedly unfond of doing.

I must disagree there. Usually a man page is all I need just to look up the syntax and available options to a program. However, for more complex operations there are volumes of HOWTOs and other detailed, step-by-step guides available to anyone who can use Google. Maybe during my 10+ years of using Linux I have encountered a situation where I really needed documentation and could find nothing of the sor

>>I also wonder if anyone who provides such open-source legal templates might be exposing himself to liability.

The same liability as a closed-source program. The ones I use have very long disclaimers on them that you have to click through to get anything done. But then again, what software doesn't have mile-long EULAs these days?

When I formed my S-corp, the guy who assisted us with our incorporation gave us software for all the needs the OP was asking for. Along with a binder to keep all our important

You're misunderstanding the problem. It's not a question of, what happens if this is done badly? It's a question of, what happens if this isn't done by a lawyer? Have you never heard of "practicing law without a license"? If you draw up contracts or other forms for other people to use, that's exactly what you're doing. And you aren't just open to civil penalties like with poorly-constructed software. You could face criminal penalties, including fines and jail time.

even there you best you will get is some wild guesses as to what is generally held to be legal and enough "buzzwords" to speak to your own lawyer without making a fool of yourself.

No lawyer worth his bartab is going to say "this is what the law says" unless they are a local lawyer and you have some sort of payment arranged. (yeah you may be able to get some help buying one of the paras a beer but just remember 2 things1 You have lost points just getting to the courtroom2 the man that is his own lawyer has a

No, there isn't. A "community" of lawyers would be like a "herd" of cats. Lawyers are the most selfish and greedy people there are, by profession, and they're never going to join forces to do anything big for the common good, even if it were for their own good. Even when they join together into "law firms", they're constantly bickering and fighting with each other over such stupid stuff as what order

Even if 95% of lawyers are evil people (which is a bit on the high side, methinks), 5% of the million-plus lawyers in America is still a lot of good guys.

And it doesn't even require a true community, in the sense of Firefox development. A few lawyers in each state should suffice for the common forms, and hell, they might even get some business out of it from putting their names out there. Lord knows there's enough competition with one out of 300 Americans being lawyers.

It sounds like your small S corp consultancy that helps people run their businesses could use a small consultancy to help you run yours. At the very least you probably should learn a bit more about contracts and meeting requirements somewhere, having a piece of software that writes you a contract by popping up a dialog box "Enter Consultants Name:" isn't going to work out very well. At the risk of committing slashdot heresy, I'd suggest books. There is a large and well established free repository of them ne

I also wonder if anyone who provides such open-source legal templates might be exposing himself to liability. Suppose someone uses such a template and it turns out to be incorrect, even by some minor technicality, and as a result that person has additional legal expenses or other damages. They just might try to sue the person who produced the template.

You can sue anyone for anything, it's getting the court to agree that's the hard part. In this case, no sane judge is going to agree with assertion that posting a document template or example form to the Internet constitutes bona fide legal advice.

The root problem here is that the submitter wants to be able to do all the things that a certified lawyer (or accountant, etc) is trained to do, but doesn't want to hire one.

They just might try to sue the person who produced the template. Unlike software, where disclaiming liability is a standard practice, legal advice or legal documents might be much more problematic. I am definitely not a lawyer but I hope a lawyer might take a moment to explain whether this is a legitimate concern.

IANAL but I've taken several courses at university on the law. If you produce templates like this, and are not a licensed attorney, you could be guilty of the unlawful practice of law. Depending on your jurisdiction, you may face jail time and/or fines if convicted.

Like I said, IANAL and this is not legal advice. This is just something I learned in college.

I'm not an expert in this field, but it would surprise me greatly if there were Free templates of the sort you seek. For starters, most business law is governed by state law rather than federal law, so the requirements will depend in large part on where you are incorporated.Second, the sources for those templates would generally be the experts who derive their living from selling that sort of information (i.e. lawyers, accountants, tax firms, etc.) It is in their own financial best interests not to give away that which they need to make their own ends meet. Business law and tax law are very convoluted and generally require quite a bit of specialization.

I can see the possibility of Free tools for W2s and meeting minutes, but I'm skeptical as to the availability of legal and taxation materials. Also, even if they were available, I would go in with both eyes open because as a business owner, you're on the hook for making sure you're using correct and current information, and taxes in particular change with alarming regularity.

the sources for those templates would generally be the experts who derive their living from selling that sort of information

Isn't that like.... our mantra, or something? I make a living making software and I make free crap too. It may or may not be in my financial best interest, but I like to pretend I'm not selfish ALL the time.

I know you were being funny, but there are some lawyers that aren't selfish in the least.

Google up a local "Legal Aid" office sometime and skim the sites. The attorneys work thousands of cases per year at salaries well below a national average (think "McDonald's Manager), and represent poverty level clients against big businesses like insurance companies and banks. They even take on the federal government now and then. Best of all, they do

However, you're right: there are a very small number of lawyers out there who are very decent people. The problem is that it's probably 1% of the profession. Though, as another responder pointed out, with 1 in 300 Americans being lawyers, that's still a fair number of people. Far too many are the type who convince elderly people to put them in their will so they can inherit all their clients' money.

Actually, there are several websites out there that exist for exactly this purpose - they're extremely great resources for the fledgling startup with no disposable cash for expensive legal services. If you don't mind getting your hands dirty doing some editing and don't mind really diving into the research to make sure you're up to par in your locality, then websites like www.docstoc.com are hugely helpful.

I'm not an expert in this field, but it would surprise me greatly if there were Free templates of the sort you seek. For starters, most business law is governed by state law rather than federal law, so the requirements will depend in large part on where you are incorporated.
Second, the sources for those templates would generally be the experts who derive their living from selling that sort of information (i.e. lawyers, accountants, tax firms, etc.) It is in their own financial best interests not to give away that which they need to make their own ends meet. Business law and tax law are very convoluted and generally require quite a bit of specialization.

I can see the possibility of Free tools for W2s and meeting minutes, but I'm skeptical as to the availability of legal and taxation materials. Also, even if they were available, I would go in with both eyes open because as a business owner, you're on the hook for making sure you're using correct and current information, and taxes in particular change with alarming regularity.

Another thing occurred to me when I read your comment. You can buy a good book, use online tutorials, examine source code produced by others, etc., and teach yourself how to be a competent programmer. There is no professional organization that you must join in order to be considered qualified. You're qualified if your programs compile and function and are decently well-written and that's about it for software development. By contrast, it's not nearly so easy to jump into practicing law, not even on a mi

Second, the sources for those templates would generally be the experts who derive their living from selling that sort of information

I'm not sure I follow... there's a ton of open source software out there and it's produced by people who make their living producing software. There are also a lot of low cost legal templates available (see nolo.com, there's also a similar section at my local office supply store). In any event, the templates aren't a big deal - laywers use them routinely. The bigger problem is knowing all the stupid legal quirks that aren't shown on those forms (filing deadlines, limits, proceedures, etc.). Personally, I think it's shameful that we have a legal system that the common man can't use without professional help.

but I'm skeptical as to the availability of legal and taxation materials.

How did this get +5?

Look at the old fashioned ink on paper industry... I searched amazon.com for "tax" and it claims 510242 books found (no kidding). Most comments in the article seem to be oriented around something like a free wiki version of JK Lasser's seemingly infinite series of tax books, or maybe NoLo's legal books. Does not sound impossible at all.

Also w/ regard to specialization making a general book useless, that is like saying the existence of Knuth makes all other possible future C.S. books im

You've got to be kidding. Here in the USA, the law is for the rich and their lawyers. Why would the government go to the trouble of putting up helpful websites for non-lawyers? All that's going to do is reduce the amount of business that lawyers get, and since the government is composed almost solely of lawyers, they're only going to do things to help themselves and their buddies.

You've got to be kidding. Here in the USA, the law is for the rich and their lawyers.

Which, of course, is why the IRS has an entire section dedicated to starting a business [irs.gov] and why Nevada also provides the same [state.nv.us]. Heck, Nevada even has an FAQ [state.nv.us], and the IRS gives you a checklist [irs.gov]. I'm willing to bet that, if you hit your local Chamber of Commerce, you'll find information there, too. Heck, even my local university has online resources available [unr.edu] for new businesses.

I think it depends more on how enlightened your state government is. They're the ones you'll have to file most of your taxes through, and the better ones (the ones that want to attract more businesses) have websites that allow you to e-file most of your work. That means the development is funded by taxpayer dollars, and if you can convince them to use open source for all of the standard reasons, so much the better!

There are several business-grade open-source accounting programs that might be of help to yo

The reason I say this is that, IME, OSS doesn't really deal very well with very niche requirements that aren't directly related to technology or anything that is not interesting from a technological standpoint.

Sending, relaying and receiving email? There's a plethora of products.

Writing a web application? Again, more options than I can even contemplate.

Filling out your tax return or paying your staff? One or two options which are generally terrible. Frankly, tax software is a fairly simple problem: start with a few numbers, add/subtract/multiply a few other numbers, send a cheque for the result to the tax man. The technically interesting bit is writing a generic engine to deal with whatever addition/subtraction/multiplication is necessary but writing the rules for that engine to deal with the various tax laws worldwide is mind-numbingly boring and there's no standard way such as an internationally agreed XML schema for the taxman to publish this years' tax legislation.

Software for your specific business niche? By definition, a niche.

Groupware? The only reason anyone's writing replacements for Exchange is because they can't stand Exchange. It's a mind-numbingly boring set of problems that nobody in their right mind is going to go near unless Exchange has seriously pissed them off or there's real money in it.

Tax software is hardly simple, though I agree it is on the technical side. Not only is there no "internationally agreed XML schema for the taxman to publish this years' tax legislation", but there is no formal record of this year's tax schema at all. The tax laws are riddled with vaguely worded provisions, some of which (in the US) have been clarified by IRS advisory opinions, tax court precedent, or regular court precedent. You basically need a team of lawyers from every jurisdiction to even figure out what the tax code is. Encoding it in software is the relatively easy part.

Oh, and there are constant updates to it, some of which come out so late that patches ideally should be out 1-2 days after the new regulation is announced. Who is the volunteer who is going to spend their life monitoring the IRS's press releases and patching tax software?

You're quite correct. And that suggests an interesting approach to tax reform: require that all tax laws and regulations fit into something like an XML schema. That would have benefits way beyond the realm of software.

Agree 100%. You're absolutely nuts if you think you can handle the taxes and accounting any better or cheaper with free software than you can using something as simple as QuickBooks and an accountant.

Free Software is only free if you value your time at $0.

LegalZoom can be helpful for small-time stuff. For anything serious, establish a relationship with a decent law firm that handles small business transactional stuff. They have hundreds of contracts that make up their portfolio and can typically start wi

Every CPA firm that I ever did consulting for relied on the "CS Professional Suite" (http://thomsonreuters.com/products_services/taxacct/taxacct_products/firms/software-services/) from Thomson / Reuters. It seemed to be the industry standard for work flow management. The software is subscription based and a couple of times a year there are new forms available.

Tax law is one of the examples that I've trotted out in the past when I get on my soap box about OSS being way behind the times and trying to recrea

Tax software is a bad example (as several people have already pointed out) but in general you're correct. This kind of revives the original argument against "free" software back when RMS invented it in the 80s: if you can stop anybody from copying your software, you can't make them pay for it, so what's your incentive to write it in the first place? And the answer is none.

Except for (as you point out) technical applications. That happens because technology companies find it expedient to donate their service

You want legal forms generated by Phil Grognard from his basement? No thanks - I trust Phil (mostly) to write software that doesn't crash all the time, but I don't want him looking out for my legal interests, and I don't particularly believe that he understands, for example, the limits of nondisclosure agreements with regard to pre-existing works in my particular state.
Just use the Nolo books. They are inexpensive, far less expensive than 10 minutes of an attorney's time (literally).

Call me old fashion, but I am a firm believer of do on thing and to it well. Your list of requests have a very broad scope and it wasn't clear if you expected one software package to do all of it. There are many great open source software packages for use with business.

GnuCash is an excellent accounting system to help you keep your financial accounts organized. I'm not really sure what is entailed with 'issuing a W-2' other than handing your employee a form. I have seen various companies use a combin

If you're doing well in your business, you won't have time to dick around creating "legal" documents and preparing your own taxes. That's what CPAs, and attorneys are for. If you had hired one of the two, he probably would have advised you to form an LLC rather than an S-Corp. But since you decided you knew better, you made a LOT more work for yourself.

If the OP formed a LLC it would be relatively simple to file his own taxes. In Massachusetts, at least, there is a pass-through taxation option on Limited Liability Companies which means you aren't taxed on the entity level - you're taxed once on your personal income (you and every other member).

If you had hired one of the two, he probably would have advised you to form an LLC rather than an S-Corp. But since you decided you knew better, you made a LOT more work for yourself.

Its possible he had good reasons that didn't make it into the article. No idea what they could possibly be, but...

The real value of a wiki or form collection website, is building vocabulary and knowledge BEFORE meeting with the pros. It is possible the original poster had never heard of anything but a S-Corp, therefore he walks in saying he's getting an S-Corp, end of story. A glance at a "forms collection" for an LLC vs an S-Corp could have been very educational...

Professional meetings are much more productive when you can evaluate the professionals advice and actions. If you can't, then don't waste time meeting, just hand them barrels of money and hope they do the right thing for you, which is not exactly a recipe for business success.

S-corp is not that bad anyway. Yes, you have a more complicated return but all the income flows through in K1's to the owners (the guy and his wife). While functionally an LLC is a partnership and therefore uses a simpler return, it also has a lot of limitations, a lot of which haven't been tested yet. For maximum limitation of liability and the ability to do business in the most possible jurisdictions with no worries, the S-corp is quite a nice little way to organize a business.

You can get quickbooks from intuit for around $200 that will provide a lot of that. I also use a payroll company for $40/month to handle all the taxes and filings for payroll.

The issues here are legal, not technical, and you *need* to have legally competent people backing the products that you use in these domains. Also, tax law changes on an annual basis. Intuit has a team of lawyers helping them stay abreast, as does my payroll company. You do not want to end up in front of the IRS (or worse, tax court) and not have a leg to stand on.

I hate to say it, but it costs money to be in business. I just saw statistics a few days ago that 1/4 of payroll tax forms (941s) are erroneous, with the average cost being $670. Do the math. It's cheaper to pay the pros up front. I could go on and on, but, take it from me. I've paid plenty due to stupidity over the years. It's cheaper to put the right professionals in place to support you in your non-core tasks in the same way that people have put *you* in place to support them in their non-core tasks.

I have to say this mentality probably precipitated a lot of great software. I'm sure there is a massive demand for *good* open source accounting software. And when you really get down to brass tacks, it's really a matter of doing what open source always does - mimicking the leading proprietary software!

Unfortunately, Quickbooks doesn't run on *ix. Some of us don't mind (at all) paying for accounting/hr/payroll software, but we want it for the platform of our choice. I asked on Slashdot several years ago about open OR CLOSED commercial, multiplatform accounting/hr/payroll software and there really wasn't much out there, which just blew me away. Not much has changed- I located only a few companies and had to settle for something, wishing I had more choices. However, for us, the platform was very importa

I will never, ever, trust Quickbooks. Intuit can bite me and was one of 2 reasons that I began to really switch to open source. Quickbooks online offerings back in 2001-2 were trying to lock you into their product, changing policies on your personal data retention, selling and or losing your personal information and worst of all made you do all the work so you could give it to an accountant. I do not accept a cloud environment unless I own the cloud.Simply using templates of best accounting practices in spr

So, on December 21, 2009 you have decided it might be a good idea to have some accounting and corporate secretarial records for the year 2009? Here's some free business advice - this is really something you want to sort out BEFORE you start operating, at least in draft form. Knocking up a bunch of retrospective meeting minutes, W-2s etc from memory and a box of unsorted receipts or correspondence is NOT a good idea.

That doesn't mean you have to become an expert accountant/lawyer yourself, but you should kno

I realize that I may incite a religious war between the TaxCut camp and the TurboTax camp, but using a $75 piece of professional software seems like a good investment. Either would probably do, though I've used TaxCut for most of a decade for my LLC, and it walks you through the business filings pretty decently.

I'll presume that you chose an S-Corp for a reason, and won't badger you about using an LLC for a two-man shop. I will strongly recommend that you go over to irs.gov [irs.gov] and read up on the S-Corp rules. There are a bunch of very helpful publications, and the IRS has gotten much more customer-oriented over the years.

Yep, I had a small unincorporated business a few years ago. They make a tax software package just for that.

It was $80. It found $2000 worth of things that I didn't know I could write off (% of mortgage, equipment, parts, taxes I paid, &etc), then checked for updates and found a $500 tax grant when there wasn't even a line for it on the paper forms. Those aren't tax-credit values rated at 17% counting leastwise -- that was $80 turned into $3500 in actual cash. (I thought I was going to have to pay $1000.

If you didn't have a good accountant help you set up the company, you should hire one pronto. If you're just now searching around for free software because you haven't been keeping appropriate accounting records, you're going to have some really late nights before tax time. There's a reason everyone uses Quickbooks -- it's cheap and it works. We just sent our QB files over to our accountant and he filled out a return for us. You also need to set up your ledger. This is much less about software than it is about legal requirements, accounting, taxes, and deadlines. The integrations that nearly everyone does for Quickbooks ($200 or free online), from payroll to shopping carts, make it almost a no-brainer. But it's not free.
I ran a small business for four years. Accounting, billing, and record-keeping was a big pain in the rear. I'm a tech who likes to do tech things and solve problems. After four years of hiring, firing, paying, billing, filing, etc. I went back to being a regular employee at a big company. I even have health insurance now. And remember, all that accounting is not billable to your clients. (I also had a 15% discount to anyone who paid fast.)
Seriously, don't mess around trying to figure out every tax rule on your own. Hire a professional. For $500, it's the cheapest way to have some piece of mind in case you get audited, which is far more likely in your status. Even intro to accounting is a two-semester course. If you can't afford it, remember -- most businesses don't make it past their first two years.

sampas is exactly right. Professional help is not that expensive, my attorney takes care of the yearly filings for $200, I trade with my CPA accountant for services for the tax filings, and Quickbooks is cheap. Any of the commercial payroll services are well worth it. Filing and taking care of all this stuff is a tremendous hassle and time you could be out billing. Not to mention if you get it wrong the government holds you personally responsible.
I also have an IT services firm, after 3 years and a mo

Little do you know, you are looking for the "Nolo" series of books at your local library, you know, the library, the place where homeless people go for internet access... Your local library, unless its total ghetto, probably has the entire nolo series available to read and/or borrow.

Nolo has a website with a lot of marketing, yet also some information, at:

Your best strategy is to skim thru, maybe even check out, the books that look interesting at the library, then purchase the most recent version from nolo for daily use.

I think, based on your description, you want their book "Legal Forms for Starting & Running a Small Business"

I have absolutely no connection to Nolo other than reading their educational books at the library when I was a kid, convinced me that the profession of lawyer-ing or whatever was not quite as interesting as it appeared on TV.

This is good advice, and the following is not intended as a criticism.

Then, (directed at the original poster) just before you end up with the inevitable brain aneurysm brought on from trying to learn the legal AND tax codes at the federal AND state levels and get all caught up with your paperwork in a few short months, you can hire professionals anyway, but at least you'll know just enough to understand what the hell they are talking about.

I've picked up several Nolo Press books over the years and have found them quite useful. Think of it as a tier one legal source that can help you navigate the convoluted in and outs of the legal profession.

For some things you may still need a lawyer that can review what you have and make suggestions as to whether it is legal in the state you are in. Since the lawyer would be reviewing the documents and not writing them, you could probably save billable hours.

I am a lawyer and I know one set of books very well. The Accountant has a whole other set of books that he knows very well.
I once did a bankruptcy for someone. He had 90k/yr in income and made another 90k/year in consulting. He did his own taxes for a few years, the IRS disagreed, and his biggest item on the petition was the IRS debt. They can take a while to catch up to you, but when they do.....
Pay the Accountant, this is not something you can "just do with a form". The Attorney version of this i

Incorporating a tiny, tiny, business has far fewer advantages than most entrepreneurs think, and, as you are finding out, imposes a large pile of PITA paperwork burdens. A cookie-cutter S-corp with only you and your wife as shareholders is not likely to provide much protection from legal liability, which is why most people incorporate to begin with. The courts could quite possibly see that the corporation is merely a layer of paperwork on top of your own personal assets. In any case, the legal fees fight

I'd have to disagree on this one; true the legal protection is almost negligible, but the formality of an S-Corp helps to simplify some things and keep personal and business finance separate. If you have a 50%+ net margin and less than $200k in gross income, maybe it would make sense... but anything that you can't keep track of on a single sheet of paper really needs the formality.

You can separate business and personal finances with the help of a small-business accountant. There is no need to deal with the massive pile of annual paperwork that a corp involves just for that. (Annual "meetings" of the "shareholders", periodic "meetings" of the "directors", "stock certificates", etc.) All that is really overkill for a husband-and-wife business.

I've had my business for about nine years - and we do lots and lots of IT management & consulting.

Regardless of how small your business is you need to hire a competent accountant. Free forms are no substitute for education and experience in this field, and you can seriously screw yourself over (legally *or* financially) if you don't know what you're doing. I use the services of a contracted attorney, a contracted general business accountant, a contracted bookkeeper and a contracted federal tax accountant. And I've only got three people on our full time payroll.

Relying solely on free forms is similar to saying, "This free Linux CD will handle all of my company's data processing, storage, management, security & protection needs by itself. We won't need any IT staff at all!"

My point is that it doesn't really matter whether the forms are free or not - you need experienced people who know what to do with it; otherwise you can get yourself into some sticky situations pretty easily.

Your accountant already has software to deal with the 300 pages of cruft you need to generate quarterlies and yearlies. You don't want to waste time you could be spending building your business on learning tax law which will be half-irrelevant next year when the laws are again changed. You should familiarize yourself with a business tax form, just so you know how to categorize your expenses, this keeps your accountant hours down and saves you from a barrage of e-mails when your trying to get actual work don

Meeting minutes for a C or S corp are actually more important than one would expect. You are always asked to provide them for things like a line of credit or even some business certifications. Meeting minutes shouldn't really tell anything, just be a record of having a meeting. Corporations are required to have periodic meetings... and the meeting minutes are there to prove you met that obligation. (You also need to issue notice of meeting or waiver of notice documents as well...) Having everything ele

"It seems like this should be a priority of the open source community..."

The priority of the open-source community has, generally speaking, never been nor will ever be business. Once you learn that, you learn everything you need to know about open-source, and why it does it's job so damn well. The priority of open-source is "source" that is "open". End of.

And what you're asking is basically for legally-binding forms, documents and contracts. That's not something that "open-source" (or more accurately in

Seriously, filling in the form is only a tiny fraction of the amount of work that is required to actually calculate the numbers that go on the forms. You need real accounting and payroll software, or a service (ADP, Paycheck, and so on) to do it for you. Creating a W2 template would be a waste of effort.

You aren't in the business of doing taxes. You're in the business of providing services to other small businesses. Focus on what you are good on and absorb the cost of taxes as a business expense. Whatever you get setup this year is going to be out of date next year. On top of that, the tax code is always changing so even if you do create a decent foundation, you're going to have to constantly keep it up to date. Preparing taxes is a profession in and of itself. Just as your clients aren't web develop

when I ran a business in 1995 to 1997 and 1999 to 2000, I could have used free and open source business documents and software.

Every job I had a manager would say "you nerds don't understand business" when we wrote programs for them, as to calling us programmers as nerds. I went for computer science and information systems college courses and then later went for business management and e-commerce courses so I could learn how to make those documents, do accounting and finances, etc.

Don't expect software to be able to do this for you. Tax laws change every year, both federal and state. Requirements for corporate filings change every year. Payroll requirements change every year (withholding amounts for FICA, FUTA, unemployment, health insurance requirements, etc).

I have an S-corp, but I don't do any of this myself.

I have a payroll service that costs $50 or so per month. For that cost, they do direct deposit, tax withholdin

1. Your first mistake was that you probably really wanted to set up an LLC.
2. Hire someone else to do it. Seriously. You might be a superintelligent shade of the color blue, but you're no match for someone who does this professionally. A good business accountant will make you even more money by finding all the writeoffs you're too much of a wimp to claim. I run all of my books through Quickbooks through the year and then pay $180 at the end of the year for a CPA to go through it. I also pay a payro

NoLo have several books that are marginally useful for this; "Legal Forms for Starting & Running a Small Business is staring at me from the shelf across the office. They were helpful for us in our 6-months to a year, but that is about it. (You grow out of that kind of stuff pretty quickly.)

The most cost-effective way we have found to deal with this stuff (if your time is worth anything) is to out-source it. Send your W2s and 1099's through ADP and the like. Small regional banks will often give you d

The best FOSS tool you can get for this is Open Office and templates you build or purchase for it. Taxation ERP is the most boring job in IT and you won't find FOSS programmers doing it for the love. And it's not about forms or templates anyway, its about writing the right numbers in the right places, and for that you need a professional, no matter how small your business is. Hire or contract one. All else quickly becomes a waste of time and money.

I've had great success over the years starting with a free form or template and then running by a professional lawyer or accountant for revisions. I'll happily pay them for one hour of their time rather than get billed for all the time they have their paralegal or whomever typing it up and putting sticky-notes on photocopies. Professional rates for professional insight is a good value. $60/hr for clerical, not so much

The SSA web site allows for direct submission of W2 and W3 AND generates the required W2 PDFs for the employees.

Other tax forms-- For all other forms I use both the irs.gov and the state tax department web site. You may also enroll in EFTPS for direct deposit of Federal taxes (it may be required btw).

Contracts, etc-- get a legal forms book if you don't want to google around. When I began my business, I used one of the Nolo books. It was cheap, provided a good overview of business requirements, and typically

There's lots of web-based stuff too, which is increasingly being offered as a part of a package with other services. Payroll processors are common, for example: they handle paying your employees (check or direct deposit), and as part of the deal withhold payroll taxes and applicable income taxes, send out W-2s to the employees, send the appropriate filings to the IRS, and keep the appropriate records. It's not just the software, but the fact that they also handle things like doing the direct deposit, which otherwise you'd need to set up and keep maintained.

I'm usually a fan of doing things yourself, but for $300-600/yr for a small company for services like those, I would probably just let them handle it, because the fixed costs for dealing with payroll for only a handful of employees are too high.

I spent a great deal of time looking for good web based, open-source accounting software, but found absolutely nothing that comes close to Quickbooks.

Right now, I'm using SQL Ledger, which is more-or-less OK, but the UI is firmly rooted in about 1990 and printing (especially checks) is really lacking. And while Quickbooks might run udner Wine, I'm really looking for something web-based so I can enter billing information and look stuff up from "wherever", instead of waiting to get back to the office.

> "... don't really trust Intuit with my data,..."
> My impression of Intuit is that they are one of the most abusive big companies in the United States.
> Here are just a few examples: Intuit abuses.

Minor update. I just signed up for the free trial for $10/month.

It sucks. Everything useful (sync with online checking, etc.) is only available in the $35/month package, and there's no way in hell I'm giving them over $400/year just to handle a small business. And I have zero trust that they wo